CPE Quiz

CPE Quiz

CPE ARTICLE: EMBEDDED COMPONENTS IN LEASE AND NON-LEASE ARRANGEMENTS

By Josef Rashty

Today’s CPA offers the self-study exam for readers to earn one hour of continuing professional education credit. The questions are based on technical information from the preceding article. If you score 70 or better, you will receive a certificate verifying you have earned one hour of CPE credit – granted as of the date the test arrived in the TXCPA office – in accordance with the rules of the Texas State Board of Public Accountancy (TSBPA). If you score below 70, you will receive a letter with your grade.

1. The following guidance is within the scope of this article: a. ASC 842 b. ASU 2018-11 c. ASU 2018-20 d. All of the above

2. FASB requires that companies consider multiple arrangements as a ________ contract for the purpose of identifying embedded leases if a company has entered into these arrangements simultaneously or within a short span of time. a. Single b. Voided c. Confusing d. Fraudulent

3. FASBconsidersinflation-indexedleasearrangementsthat varybasedonincreasesinCPI(customerpriceindex)orPCE (personal-consumptionexpenditures)as________. a. Irrelevant b. Clearly and closely related c. Non-GAAP arrangement d. Irregular 4. Lesseescanfollowapracticalexpedient,which,ifelected, allowsthemtoallocatetheaggregateleaseandnon-lease components ________. a. As multiple leases b. As they wish c. Arbitrarily d. As a single lease component 5. Lesseesallocatethefixedleasepaymentsthatincludeboth leaseandnon-leaseelementstoeachcomponentbasedon their ________ and account for them under ASC 842. a. Fair values b. Book values c. Relative standalone prices d. None of the above

6. ASU2018-20providesrelieftolessorssimilartothenew revenueguidanceinASU2016-12thatthey: a. Include in revenue amounts collected from customers for sales taxes b. Exclude from revenue amounts collected from customers for sales taxes c. Make a policy election to exclude or include from revenue amounts collected from customers for sales taxes d. None of the above 7. PursuanttoASU2018-20,lessorsmaychoosethepractical expedienttopresentconsiderationthattheyreceivefrom lessees or variable payments that they receive from them ________. a. Net of all taxes c. As they wish b. Gross of all taxes d. None of the above

8. Onnon-expedientcases,whenlesseeisresponsibleandremits thecosts,lessorpresentsthecostandthelessee’spaymenton ________. a. A gross basis c. A net basis b. An arbitrary basis d. A partially net basis

9. Whenalessorcollectssalestaxesfromalesseeonbehalfof thirdparties,thelessor ________ thatamountfromthe(lease) revenue. a. Includes c. Incorporates b. Excludes d. Either a or b

10. The article claims that lease guidance and its amendments __________ several other standards to account for embedded transactionsinleaseandnon-leasearrangements. a. Do not rely on c. Criticize b. Ignore d. Adduce to

To receive your CPE certificate by email, please provide a valid email address for processing. Please mail the test (photocopies accepted) along with your check to:

Today’s CPA; Self-Study Exam: TXCPA CPE Foundation Inc.; 14651 Dallas Parkway, Suite 700; Dallas, Texas 75254-7408. TSBPA Registered Sponsor #260 Name: _________________________________________________________ Company/Firm: ________________________________________________ Address (Where certificate should be mailed): City/State/ZIP: _________________________________________________ Email Address: _________________________________________________

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